India and Nepal have agreed to "review, adjust and update" the Indo-Nepal friendship treaty of 1950 and also decided to find a permanent solution to the boundary issue so that it is not misused by "unscrupulous elements" posing security threats to either side.

"The two Prime Ministers agreed to review, adjust and update the Treaty of Peace and Friendship of 1950 and other bilateral agreements," according to a joint statement issued today at the end of Prime Minister Narendra Modi's first visit to Nepal.

Prime Minister Modi and his Nepalese counterpart Sushil Koirala welcomed the decision of the Joint Commission to direct the Foreign Secretaries of the two countries to meet and discuss specific proposal to revise the Treaty of Peace and Friendship of 1950, which the Government of Nepal agreed to provide at the earliest, the statement said.

"Both sides agreed that the revised treaty should better reflect the current realities and aim to further consolidate and expand the multifaceted and deep rooted relationships in a forward looking manner," it said.

"India wants Nepal to give suggestions so that the issue can be settled once and for all. Prime Minister Modi said we should settle issues like friends," Ministry of External Affairs spokesman Syed Akbaruddin told reporters during a briefing on Modi's meeting with the Nepalese leadership.

Under the provisions of the treaty, Nepalese citizens have enjoyed unparalleled advantages in India, availing the facilities and opportunities on par with Indian citizens.

The treaty enabled Nepal to overcome the disadvantages of being a land-locked country. Overtime, many regimes in Nepal have raised the issue of revision of the treaty.

On the boundary issue, the two prime ministers underlined the need to resolve pending Nepal-India border disputes once and for all. They welcomed the formation of the Boundary Working Group (BWG) to undertake the construction, restoration and repair of boundary pillars including clearance of 'No man's land' and other technical tasks, the statement said.

Both Prime Ministers noted with satisfaction the excellent cooperation on security related matters and directed the competent authorities on both sides to make sure that the open border, which has facilitated movements of people on both sides of the border and has been a unique feature of Nepal-India bilateral relations, is not misused by "unscrupulous elements" posing security threats to either side, it said.

There has been a long tradition of free movement of people across the borders. Nepal shares a border of over 1,850 kms to the south with five Indian states - Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand.

Modi and Koirala also welcomed the Joint Commission's decision to direct the Foreign Secretaries to work on the outstanding boundary issues, including Kalapani and Susta receiving required technical inputs from the BWG as necessary.

The Indian side stressed on early signing of the agreed and initialed strip maps of about 98 per cent of the boundary. The Nepalese side expressed its desire to resolve all outstanding boundary issues, the statement said.

"It was assured that Nepal and India will not allow their territory to be used against each other. Both sides agreed to finalise the texts of Extradition Treaty and Mutual Legal Assistance Treaty (MLAT) at an early date," it said.

The two prime ministers expressed satisfaction over the ongoing defence cooperation. In this context, the Nepalese side requested Modi for waiver of the dues owned by Nepal to India on account of defence purchases.

They expressed concern over the slow pace of implementation of several projects under bilateral economic cooperation and directed competent officials to implement ongoing as well as the future projects expeditiously, the statement said.

"The Nepalese side requested and the Indian side agreed to take up the project for the construction of Raxaul-Amlekhgunj petroleum pipeline in the first phase and extend it to Kathmandu in the next phase to facilitate the transport of petroleum products," the statement said.

Nepal requested India to allow three additional air entry points at Janakpur, Bhairahawa and Nepalgunj, and cross border direct routes to facilitate direct flights between regional airports Pokhara-Bhirahawa-Lucknow as this would save time and cost for air travelers and also improve air connectivity between India and Nepal, it said.

The two prime ministers directed authorities to expedite the works related to the development of cross border transmission lines as agreed in the Joint Commission.

India also agreed to consider to undertake the rehabilitation of Koshi Pump Canal and Koshi Western Canal System and rehabilitation of West Gandak Canal System with a Lift System to irrigate additional Nepalese land.

The Indian side also announced enhancement of scholarships from 180 to 250 Nepalese students and experts to study in various Indian institutions, the statement said.

India also offered short courses cum exposure visits for the Nepalese undergraduate students in the leading universities of India namely Banaras, Kolkata and Delhi University under Nepal-Bharat Maitri Shiksha Karyakram, it said.